Non-bank lender stocks surge after RBI policy announcement and relaxed norms boost sector outlook

Time of India

2 days ago

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MUMBAI: Shares of non-bank lenders surged on Monday following the
RBI
's policy announcement on June 6, with many NBFC and small finance bank stocks posting sharp gains. The central bank's decision to reduce risk weights on retail loans for well-capitalised NBFCs and its dovish signals on liquidity lifted sentiment across the sector.
Capri Global jumped 15.2%, Five Star rose 9.2%, and Edelweiss climbed 8%. IIFL gained 7.5%, Bandhan Bank added 7.1%, and Geojit Financial advanced 6.9%. JM Financial, Arman Financial, and Fedfina were up 6.7%, 6.5%, and 5.9%, respectively. Among small finance banks, ESAF gained 5.8%, Utkarsh 4.6%, and Jana Small Finance 5.7%. RBL Bank added 5.3%, Fusion rose 5.2%, and IREDA was up 5.2%. Wealth and asset managers such as UTI AMC and SMC Global rose 4.3% and 4.4%, respectively, while MCX gained 6.8%.
The RBI also relaxed norms for microfinance lenders and small finance banks, further boosting the outlook for the broader sector. For NBFC-MFIs, the qualifying asset criteria were eased, allowing them to diversify up to 40% of their portfolio beyond microloans. This is expected to reduce concentration risk, improve balance sheet resilience, and enhance earnings stability.
For small finance banks, lower risk weights on microfinance loans will reduce capital requirements and expand lending capacity.
These moves, combined with a supportive macro environment, are expected to aid credit growth and financial inclusion across underserved segments.
'For NBFCs that operate extensively in tier 2 and tier 3 towns, this policy move opens up new momentum for credit-led expansion. The broader implication of this rate cut cycle is significant as it reflects a forward-looking strategy that is aligned with India's vision for inclusive and sustained growth.
As highlighted by the RBI Governor, this brings the country a step closer to the goal of Viksit Bharat 2047. With rural resilience and continued expansion in services, both urban and rural consumption are poised to become strong drivers of India's next growth phase,' said Umesh Revankar, Executive Vice Chairman, Shriram Finance.
Emkay Global said in a research note, 'The RBI heard the practical challenges of the new gold loan rules and adjusted them accordingly.
We see this as a sign of the regulator wanting to remove friction in banks' and NBFCs' ability to lend, as far as possible.'
According to
Vivek Singh
, CEO, Home Credit India, 'The recognition of abating stress in unsecured personal loans and ongoing recalibration efforts reinforces our commitment to robust underwriting and collection practices, supporting a healthier credit environment and India's growth.'
George Alexander Muthoot, MD, Muthoot Finance, said, 'For NBFCs, this is an encouraging move as it creates a favourable environment by lowering borrowing costs and extending affordable credit to underserved communities. The move, coupled with a lowered inflation outlook, is likely to support domestic consumption and stimulate credit demand in the coming quarters. Overall, we view this as a timely and positive intervention that can support a stronger credit cycle in FY26.
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